IPhone Contract Is Long and Legally Murky

July 20, 2007

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"Courts have found reverse engineering is a fair use, for good policy reasons," says Jonathan Band, a Washington, D.C.-based technology attorney. "But then you have these private contracts that seem to overturn that public policy. You really do have a conflict between the public law of copyright and private law of contract."

Band says the courts in the United States are beginning to side with corporate licensing agreements prohibiting reverse engineering. However, the European Union doesn't honor such agreements, according to Band.

The AT&T agreement also prohibits aggrieved parties from unlocking the phone. Cell phone unlocking has huge financial implications for carriers, and is the subject of legal action after the federal government gave the action the OK last year.

Class-action lawsuits are also forbidden under AT&T's agreement, a point that may run counter to a Wednesday decision (.pdf) by the 9th U.S. Circuit Court of Appeals, the nation's largest federal appeals court, which is based in San Francisco. Ruling on a challenge to a long-distance phone service agreement, the appellate court said denying class-action lawsuits might not be valid in California. Separately, the Washington Supreme Court recently ruled that cell phone contracts may not ban class-action lawsuits in that state.

The iPhone agreement also says Apple may monitor users' iPhones "to verify compliance with terms of this license." It notes that Apple may collect technical information regarding users' iPhones, computers, software and peripherals, as long as such information is not used in a form that personally identifies individual users.

Von Lohmann suggests that voicemail and text messages might be vulnerable under the agreement's terms -- although he concedes that's a long shot.

"It doesn't tell you what they are going to collect," he says. "Copies of voicemails? Keeping track of your texting? Consumers deserve clearer information."